Despite the increase in uncertainty caused by the recent inconclusive elections in Italy, Credit Suisse thinks the turmoil may be a buying opportunity for global equity, according to a note published Wednesday.

Their report on global equity strategy starts off by stating that "It is not as bad as it seems". They note that the recent drop in stocks due to doubts over Italy's next move is consistent with a near-term consolidation of equity sentiment and risk appetite.

"But we would use this as a buying opportunity, given cheap relative valuations, excess liquidity, cautious long-term positioning and an improving global growth outlook," the broker said.

Nevertheless, they do say that they continue to be underweight Continental Europe due to lack of growth and earnings momentum and the fact that investor sentiment is the most positive of any region.

However, they do show some optimism stating that "we don't think the euro area crisis is set to flare up again". Among their arguments, Credit Suisse pointed out that "other negative political outcomes in Europe (Ireland, France) have provided buying - not selling - opportunities.

JM

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